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Index falls 2% due to liquidity worries, weak property sales
By Feng Jianmin and Hu Xiaocen |
December 14, 2011, Wednesday
|
Print Edition
Print Edition
SHANGHAI'S key stock index fell yesterday for the fourth consecutive day over worries about market liquidity and slumping sales in the property sector.
The Shanghai Composite Index fell 1.9 percent to 2,248.59 points, the lowest since March 2009.
China's central bank yesterday issued 38 billion yuan (US$6 billion) of one-year notes, which exceeded the 13 billion yuan in notes due for the whole week. The People's Bank of China has been withdrawing liquidity from the financial system through open market operations for three straight weeks.
The market's decline also took its cue from the tumbles seen in the United States and European markets after Moody's Investors Service and Fitch Ratings said last week's European Union summit had failed to produce a solution to the debt crisis and boost economic growth. Their warnings added to worries that China's exports will be threatened by the financial woes of the EU, its largest trade partner.
"Liquidity is tight in the domestic market and rating agencies are targeting the European countries," said Chen Yong, an analyst with Lianxun Securities. "Worries from within and abroad are making the A shares vulnerable."
Property developers fell after data showed that housing transactions in 13 cities out of 35 tracked by Soufun.com, the nation's biggest real estate website, had plunged more than 50 percent in the past week.
Poly Real Estate Group, China's second-largest developer by market value, fell 1.9 percent to 9.58 yuan.
The Shanghai Composite Index fell 1.9 percent to 2,248.59 points, the lowest since March 2009.
China's central bank yesterday issued 38 billion yuan (US$6 billion) of one-year notes, which exceeded the 13 billion yuan in notes due for the whole week. The People's Bank of China has been withdrawing liquidity from the financial system through open market operations for three straight weeks.
The market's decline also took its cue from the tumbles seen in the United States and European markets after Moody's Investors Service and Fitch Ratings said last week's European Union summit had failed to produce a solution to the debt crisis and boost economic growth. Their warnings added to worries that China's exports will be threatened by the financial woes of the EU, its largest trade partner.
"Liquidity is tight in the domestic market and rating agencies are targeting the European countries," said Chen Yong, an analyst with Lianxun Securities. "Worries from within and abroad are making the A shares vulnerable."
Property developers fell after data showed that housing transactions in 13 cities out of 35 tracked by Soufun.com, the nation's biggest real estate website, had plunged more than 50 percent in the past week.
Poly Real Estate Group, China's second-largest developer by market value, fell 1.9 percent to 9.58 yuan.
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